K-pop giant HYBE, which was forced to repay 400 billion won ($293 million) of debt early, will issue new bonds to cover the amount.
According to Korean media reports daily economic news On October 10, investors holding HYBE convertible bonds worth 400 billion won issued in 2021 chose to repay early, forcing HYBE to come up with cash before November 5.
The bond is the third series of convertible bonds issued by HYBE with an interest rate of 0%, but there is an option to convert the bond into HYBE stock at maturity at a price of 385,000 won ($282.50) per share.
In order to profit from the bond, HYBE’s share price must be higher than when the bond matures. However, the K-pop giant’s share price has been declining steadily over the past year and a half, closing at Wednesday (October 15) 179,500 won ($131.75).
Almost all (99.95%) Holders of the third series of bonds have requested early redemption, Mel The report cited data from the Korea Securities Depository.
At a recent internal company meeting, the newly appointed CEO of HYBE Li Zaixiang trying to calm concerns about the company’s financial health. According to allkpop.com, Lee reportedly told employees that the company “1.2 trillion won Korean won (approx. $880 million) available cash assets, our financial position is very healthy.
HYBE’s latest semi-annual report shows that as of June 30, 2024, the company has 321.45 trillion won ($235.8 million) cash and cash equivalents, plus 753.1 trillion won ($552.4 million) other current assets, total 1.075 billion won ($788.2 million). The company also reported 714.22 trillion won ($523.8 million) current liabilities.
However, HYBE does not appear to be planning to use its cash reserves to repay the bonds; instead, the company plans to refinance through the issuance of new bonds.
According to documents submitted by HYBE to DART, a Korean company filing repository, the company’s board of directors has approved a new 400 trillion won The issuance of convertible bonds will be made available to the public on Thursday (October 17) and will be “used to repay the entire amount of the third tranche of convertible bonds in advance.”
Like the previous convertible bonds, these bonds carry an interest rate of 0%, but the conversion price is 218,000 wona rough 20% HYBE currently trades at a premium. The bonds will mature (i.e. convertible into HYBE shares) on October 17, 2029.
The bond will be convertible into 1.83 million shares of HYBE stock, or 4.4% HYBE has outstanding common shares. Starting from October 17, 2027, bondholders will be able to request early redemption.
The vast majority of new bonds (390 trillion won) will be Amazing Asset Securitiesand the remaining 10 trillion won Will be issued by the following organizations Wonderful Asset Capital.
Mirae Asset Securities is South Korea’s largest investment bank and stock broker by market capitalization. The bank reportedly issued HYBE’s previous series of convertible bonds and served as co-manager of HYBE’s 2020 IPO.
An official from Mirae Asset Securities told daily economic news The bank does not expect any difficulties with its upcoming bond issuance.
“We have already sold off a large portion of the volume last time, and this time we plan to sell smoothly due to strong demand from institutional investors,” Mel the official was quoted as saying.
“Investors appear to be very interested in HYBE stock, which is undervalued.”
“Investors appear to be very interested in HYBE stock, which is undervalued.”
South Korean media quoted an official from Mirae Asset Securities as saying
HYBE’s refinancing comes amid a dramatic year for the company, which has seen its shares fall by more than 25% So far this year, the company has Heejin’s thoughtsCurrent CEO of HYBE sub-brand i like it.
This spring, HYBE accused Min of conspiring to sever ADOR’s ties with its parent company, a charge Min denied. News reports suggested Min was frustrated with HYBE because she believed in the girl group ADOR produced, new jeansis being copied youIt is a girl group formed by another Hybe sub-label. trust lab.
Amid criticism, HYBE reports disappointing first-quarter earnings, revenue down Annual increase of 12.1%. HYBE attributed the decline to the ongoing hiatus from its biggest K-pop act, base stationwhose members are performing compulsory military service.
Company’s second-quarter profit rebounds, revenue hits record high 640.5 trillion won ($465 million),one 3.1% Annual increase and above 77.5% every quarter.
However, this only resulted in a temporary increase in HYBE’s share price.
Declining market value has become a common problem in the K-pop industry this year. SM EntertainmentWidely considered the second-largest K-pop company after HYBE, its shares have fallen nearly 30% year to date. JYP Entertainment Its shares have fallen by half since the start of the year.
In addition to weak economic conditions in East Asia due to China’s economic slowdown, South Korean news reports have linked the country’s weakening entertainment industry to various celebrity scandals and tensions between artists and their record labels.global music business
